Oil Building on its Strength above $46.00 Mark
Extending its Wednesday's sharp recovery from sub-$44.00/barrel mark, WTI crude oil is now comfortably trading above $46.00 level at day's peak of $46.35.
Crude oil witnessed a sharp up-move after the release of EIA's latest
weekly report on US crude oil inventories report that showed inventories
unexpectedly fell by 3.4 million barrels as against an expected gain of
100,000 barrels. The shortfall in inventories boosted crude oil prices
higher back above $46.00/barrel.
Crude oil prices are now within striking distance of touching a
multi-month high level of $46.75, earlier tested in late April.
Sustained move to a fresh 2016 high now seems to assist the black gold
to extend its upward trajectory in the near-term.
Technical levels to watch
From current levels, oil seems to make a fresh attempt to retest $46.75
multi-month high level resistance, which if conquered should open room
for further appreciation towards Nov. 2015 highs resistance near
$48.25-30 area.
Meanwhile on the downside, $46.00-$45.95 area now seems to have emerged
as immediate support. Failure to hold this immediate support seems to
drag the commodity back towards an important support near $44.50-40
zone. Weakness back below $44.50-40 support might negate near-term
bullish bias, turning the commodity vulnerable to extend its near-term
corrective move.
